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October 14, 2009

Redistribution of Wealth, Taxes, and Health Care

Our current government in both the executive and congressional branches as well as many of their supporters are in favor of legislation that supports wealth redistribution. It isn't a question of if they are; it's a question of how much. We've heard the president make a comment about spreading it around and while candid, the comment was not made in jest. Despite that isolated comment, the ideology is present and in our system, on purpose. We see it. While you can argue its intent you cannot argue its presence. Again, it's a question of how much and the intent.

I wouldn't characterize wealth redistribution as providing support to those that need it. Disadvantaged children, old people that have fallen on hard times and the disabled are all people we need to look after and care for our society. Most would agree that there is plenty to go around for those that truly need it. After all, most of us don't hesitate to do some level of donation to charity simply because it's the right thing to do and we don't need to burn too many brain cycles to make that moral decision.

Unfortunately, redistribution of wealth is something that we are seeing more lately, cropping up in different bills, many of which are turning into laws. There is a fine line between spending tax dollars to support those that need it and handing it over to people that don't. Welfare is a good example of a program with an intent that can do a lot of good and provide a service we can agree is needed. But there is abuse that takes a legit program and turns it into handouts for losers and lazy people. It's a tough issue to solve and most everyone would agree that we don't like to see abuse. But what about other forms of wealth redistribution? Our progressive Federal Tax Code is a great example, perhaps the best example. We essentially have half of the population paying all of the income taxes. Yes, it's true. Those of us that are paying the taxes (half of us) are the contributing so that everyone can benefit. So we have half the population not contributing to the pot but are benefiting from it. The progressive nature of the tax code enforces those making more to pay more (higher percentage) and those making less to pay less or none at all. That is classic redistribution of wealth. My income is seized and dealt out to others. Many forms of taxation go beyond the government's enumerated powers and are thus unconstitutional. Constitution aside, is it right to take from one class and give it to another? I say no.

How about personal tax credits? Tax credits for children are only available to those that make under a certain amount of money. So wealthy folks pay more money and do not receive a credit for having children. But there are millions and millions of individuals that do not pay income taxes (meaning, they may pay income taxes, but they get it all back at the end of the year) and they do receive the credit, despite not paying a cent into the system. They are not getting money back that was ever theirs; they are getting a check that is someone else's money. The check comes from the government, which gets all their money from half of us. Is that fair?

Many would argue that it's perfectly fine to offer assistance to those that don't make a lot of money. If that is the rational and moral stance, then shouldn't our middle class give up what they have and give it to truly impoverished? Most of our non-tax contributors live in shelter and eat and have televisions and cell phones. How about they give up their phones and televisions so that starving people in Africa can eat? Isn't that the right thing? If it's ok to take money from one class and hand it over (no strings attached) to another, then shouldn't that apply all the way down? I doubt those in favor of taking money from people with more money would be willing to give theirs to someone who needs it more than they do. By the way, tax payers in the country already spend bazillions of dollars to feed the hungry all over the world. The greedy capitalists are feeding the hungry. That president many hated, George W Bush, spent more to assist Africa with humanitarian aid than any other president in history. He's viewed by many that pay nothing as the prime example of the greedy rich guy. How does that add up exactly? So let's see, someone contributes nothing and they are righteous because they care. Others collectively contribute everything and they are greedy for not contributing more because they have more. So if an individual accumulates wealth, they must be doing it at the expense of others and are therefore greedy. To me, greed is more about wanting to have something that isn't yours.

So let's continue with an example that is on the table today, health care. This notion of a single payer system (the "public option") is another form of wealth redistribution. Basically, the proposal on the table suggests that the half of the population that contributes income tax dollars should pay for the half that does not to have health care. This proposal, to me, is offensive. I'm completely fine with funding Medicare and Medicaid to assist the old and the needy. I won't go into how the government has completely run those programs into the ground. Sticking with the premise of this post, the idea that millions of people will get their health care for cheap or for nothing while others of us continue to carry a bigger and bigger burden isn't fair. I agree there are problems and I do propose reform but sticking with what is on the table as of this post is wrong. In short, I am obligated to pay, to have my property confiscated, so others can get health care with no strings attached. In other words, by no action of mine, I've become indebted to someone else and that someone else has not obligation back to me. Anyone can live however they want, abusing themselves through poor living, and I'm obligated to cover it. If I choose not to, I will be incarcerated. Think I'm exaggerating? If I don't pay, I will eventually be arrested and I will lose my freedom completely. The person I'm magically indebted to can do absolutely nothing and continue to exist with their poor habits, freedoms intact, with cheap/free health care.

There is class envy, no doubt. Many people feel like they should have the nicer things that their neighbor has. After all, if I'm a hard worker and they too are a hard worker, why should they have a new car and why am I driving a clunker? I need more televisions, flatter televisions. I need a new cell phone every year. I need a data plan too. I can't afford it but I should be able to afford it. So I'll run up my credit cards and someone else should help me pay it off. I should make more money because I just should. Executives have too much money and should give some to me because that would be fair. The man is holding me down. I can afford a four dollar coffee drink just about every day, multiple televisions, satellite television/cable, newer clothing, pedicures, etc., but I don't want to have to spend a whole heck of a lot on medical services. That should be cheaper for me because I can't afford it (even though I can afford plenty of other discretionary things). These are things folks may not be saying but they are what they are thinking or at least how they act. Priorities are out of whack.

Having these opinions may seem insensitive but I really don't think it is. It's perfectly reasonable to me that individuals would expect to keep the product of their labor, after taxes of course. And it's also completely reasonable to question where our tax dollars are going. The government exists for well documented purposes. More and more we're being taxed for things that are outside the enumerated powers and there are mounting examples of wealth redistribution schemes. Those that do not pay income taxes and are fine with that have nothing at stake in their minds, perhaps. It's much easier to spend money that isn't yours and that's part of the problem. Sure, someone will vote for free health care or whatever, if they aren't going to have to pay for it.

I have to credit Andrew Wilkow here as he's been brilliant in articulating these arguments. So to be clear, I'm stealing some of his ideas for a good portion of this post.

3 Comments

Why would progressives accept a half baked health care reform when we can insist on real reform?
I am sorry, but I just can't bring myself to support this plan that is imminent. It has a few good things in there that are improvements but still does not go far enough to reduce costs of health care nor cost of health insurance for people like myself who have health insurance now. Between myself and my employer total we pay over $18,000 of annual premiums to cover 2 parents and a child. This is atrociously ridiculously costly.